This is the year you’ve finally decided that you’re ready to buy a house – yay! The only problem is, you aren’t quite sure where to start. So, maybe you hit the internet to Google search what your next steps should be and find out you should probably get pre-approved. The internet is likely going to throw you all kinds of results for online lenders that you can do this through, which sounds appealing to some because if you’re anything like me, you’d rather do something fully online instead of actually talking to someone; however, it might not be best to go this route and I want to share with you why.
When a new potential buyer contacts me for the first time, we usually touch base about finances and the need to find out what their home buying budget will be. Sometimes they will tell me that they already got a pre-approval or quote from somewhere online, which is fine, but I do always encourage them to get a second opinion with a local mortgage professional. Do you absolutely NEED to use a local lender for your mortgage – the short answer is no, but the longer answer is definitely YES!
Here are 5 reasons why you should use a local lender when buying a home:
- Face-to-Face: Choosing your lender really is just as important as choosing your real estate agent. You want to work with someone that you would be able to meet with in person if you chose to, who can explain the process to you in detail, and who you can trust. The fact that you could show up at their office also makes you more than a number in some database. They want to go the extra mile for you and build a relationship with you.
- Knowledge of the Local Market: Local lenders will have a knowledge of what is going on in your market that you’re buying in, which means they have a better understanding of property values and knowing the market value of your home. On the other hand, an online lender will have no way of knowing the specifics of the city/town you’re buying a home in because they most likely have never lived or worked in that area before.
- Reputation: When you are ready to write an offer, you will also need to submit your pre-approval letter to show the seller that you are able to afford the home you want to buy. This letter will also have your lender’s information on it. Most real estate agents understand the importance of working with a local lender, so if you decide to use a lender that is out of state or online only, your pre-approval could look less appealing than others that you may be competing with.
- Relationships: Not only is it important for you to establish a trusting relationship with your lender, but they want to build that relationship with your agent as well. If a local lender keeps the agent that they are working with happy, there is more of a chance that the agent will continue to refer them to clients and other agents. Online lenders do not work on referral-based business, so this isn’t something that is important to them.
- Less Stress: Local lenders are easier to get ahold of after hours or on the weekends. Online lenders and larger bank corporations will likely not be taking your calls if you need an estimate of your costs to buy a home that you liked over the weekend or updating your pre-approval letter so you can submit an offer before a deadline on Sunday evening. Local lenders are much more available to answer your questions and get you what you need on time.
Long story short, you do not HAVE to use a local lender, but it can definitely make the whole transaction flow more easily and end up being less stressful for you, which – at the end of the day, isn’t that what we all want?
If you’re thinking you’re ready to take a deeper dive into your finances and want to see how much you might be able to be pre-approved for when buying a home in the Pittsburgh area, I have a list of trusted local lenders that I can refer you to. I always recommend that you do your own research, but shop local!
If you want to know more about the home buying process, make sure to check out my free resources available on my website by clicking HERE. There you will find a Future Homeowner Club guide & 5-day Home Buyer Bootcamp e-course!